06 October 2015

Glendale 180 Project Approval Was Secured Only With Sham Voters

I give props to fellow Colorado attorney Tim Flanagan, whom I have had dealings with in various cases, for fighting the good fight against the City of Glendale in court, in connection with its Glendale 180 project.

The City of Glendale is in Arapahoe County, has under 5,000, almost no single family housing, and is entirely surrounded by the City and County of Denver.

Glendale sold one square foot of vacant brown grass at a corner of a municipal park to five different people (two of whom were city employees), in order to stack the ballot in an August 4, 2015 election to establish a 14.3 acre downtown development authority, and a previous effort to establish a previous special district.

These sham property owner votes allowed it to outvote the three other land owners in a proposed new taxing district (only one of whom, Staybridge Hotels represented by Flanagan, pays property taxes) on a vote to establish a the new taxing district, which passed by a vote of 7-3, two of which were cast by Staybridge which owns 23% of the land in the proposed DDA (71% is owned by the Glendale, which it feels makes its actions morally justified).

The only three actual residents of the proposed DDA (who were registered to vote at Staybridge Hotels addresses) didn't vote, although their failure to vote may simply be because those individuals no longer live at the addresses where they were registered to vote (which is not uncommon for people who list an extended stay hotel as a residential address).

Yet, under election laws that have generally held to be constitutional, property owners may be given a vote in certain kinds of local government elections (in this case, apparently on a one parcel, one vote basis), notwithstanding the usual one man, one vote rule of constitutional law.

Apparently, this little known practice is common in Colorado:

The creation of small landholders is a common mechanism by which to form metro districts in Colorado and meet the ownership requirements laid out in state law, according to Ann Terry, executive director of the Special District Association of Colorado.

Another private taxpayer, the owners of a rug shop, were stripped from the district after making a stink over the City's plan to use the power of eminent domain to take their 6 acre property (they were offered $11 million and turned down the offer), to prevent it from voting against the proposal. The rug shop owners were pleased to avoid the eminent domain seizure risk, but their removal from the district did gerrymander the group of remaining voters.

Flanagan is arguing on behalf of his client that this cheap trick improperly circumvents TABOR's requirement that new taxes be approved by voters. The methods used by Glendale are obviously a dirty trick, even if they are common. While Glendale is free to do what it wants with the 71% of the land it owns, imposing a tax on a single land owner approved with fake voters doesn't sound like a legitimate way to go about doing it.

The larger merits of whether Glendale should be able to use the power of eminent domain to assemble property to make it suitable for business development (one of the main purposes of the DDA is to allow Glendale to use the power of eminent domain to force Staybridge to sell property to it) are also controversial.

Eminent domain is permitted for public works (e.g. pipelines and roads), and to abate urban blight, but it is a long shot to call that part of Glendale blighted, even if it could arguably have a higher and better use in connection with the Glendale 180 plan. But, it is not generally permitted to permit private profit for future land developers. Usually, property assembly is left to private developers who lack the power of eminent domain. Those private developers then seek to have the property rezoned for a project once it is assembled, not by a governmental entity.

On the other hand, eminent domain power exists in order to curb "rent seeking" by holdout property owners that get more than their fair share of the total investment in a project by insisting on prices far in excess of the value of their land in its current use that are only possible to realize if they cooperate.

On the law, Staybridge probably faces an uphill battle. But, it is a fight worth fighting, the legal theory advanced is not frivolous, and even if this battle it lost, it may convince the Colorado General Assembly to change the law of eminent domain going forward in the State of Colorado.

This case could also easily influence the national debate over the use of the eminent domain power to facilitate urban planning in a manner similar to the landmark Kelo v. City of New London case (545 U.S. 469 (2005)), in which the U.S. Supreme Court in a 5-4 decision "held that the general benefits a community enjoyed from economic growth qualified private redevelopment plans as a permissible "public use" under the Takings Clause of the Fifth Amendment." The City won the Kelo case, but energized opponents of this kind of used of the eminent domain power in the process, resulting in tighter restricts on this kind of taking under federal law, and under state and local law in many places.

1 comment:

Shortly after the article came out, Glendale cancelled the election. This could be due to publicity or could be due to bond counsel deciding that an election likely to be contested is not good enough to support issuance of a municipal bond supported by their opinion letter.